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Achieving a More Sustainable Airport Industry Every Day

By Kevin M. Burke, President and CEO, ACI-NA

Airports are more than gateways to travel.  Airports are gateways to a more sustainable community. And while the calendar says today is Earth Day, airports are in the business of being stewards of the environment all year long. I am especially proud of the positive work North American airports undertake every day to be good neighbors, leading the way in establishing environmental best practices in local communities.

Earlier this week during our Airports@Work Conference in Austin, TX, ACI-NA recognized the airport industry’s very best in environmental achievement.  Each year, the ACI-NA Environmental Achievement Awards are presented to airports that strive persistently to preserve the environment. This year, we are proud to recognize Tampa International Airport, Gerald R. Ford International Airport, Vancouver Airport Authority, and Nashville International Airport for their continued leadership in protecting the environment, educating their community, and creating a more sustainable industry.

As they advance this important work, our member airports continue to impress in their ability to innovate and implement better and more sustainable strategies to protect and preserve the environment. Minimizing our industry’s environmental footprint not only protects valuable natural resources, but it also makes great business sense because we know that sustainable business habits reduce operating costs.

North American airports are also demonstrating global leadership and becoming better partners in the aviation system by managing and reducing their carbon footprint.  As North American airport participation in the Airport Carbon Accreditation program grows, ACI-NA applauds the significant steps airports are taking to be leaders in environmental stewardship.

ACI-NA joined Airport Carbon Accreditation and recognized Seattle-Tacoma International Airport as the first North American airport to attain certification in 2014.  Since ACI-NA joined the program, 12 North American airports have joined more than 150 global airports in attaining certification, including Seattle-Tacoma International Airport, Montréal – Pierre Elliot Trudeau International Airport, Portland International Airport, Portland Hillsboro Airport, Portland Troutdale Airport, Victoria International Airport, Dallas/Ft. Worth International Airport, Denver International Airport, Honolulu International Airport, Toronto Pearson International Airport, San Francisco International Airport, and Winnipeg Richardson International Airport.

Join me in congratulating San Francisco and Winnipeg as the newest members of the Airport Carbon Accreditation family.  By achieving the ambitious goals of Airport Carbon Accreditation, these airports are setting our industry on a path toward continued success in innovation and sustainability.

These powerful results are not because of ACI-NA.  This leadership in environmental stewardship comes directly from engaged industry through ACI-NA’s Environmental Affairs Committee.  ACI-NA’s Environmental Affairs Committee – one of our largest and fastest growing committees – is responsible for the development and implementation of ACI-NA environmental policy positions on issues such as noise, air quality, water quality, waste management, wildlife, and environmental review processes. Over the last few years, this group has undertaken major industry projects to set our industry on a course for a more sustainable future, and their work is paying off on Earth Day and every day.

Cyber Security, Why Should You Care?

By Liying Gu
The ACI-NA Risk Management Committee kicked off the New Year with its 14th annual Risk Management Conference held in the warm and sunny Las Vegas with close to 140 attendees, very close to setting another new record.

The first day of the conference covered multiple risks airports are facing, from safety risk, wild life risk, environmental risk, cyber risk, event risk, construction risk, to enterprise risk and offered suggestions of risk identification and mitigation in a systematic manner.

Of all the risks covered, cyber security and the liability associated with the risk exposure is gaining more and more attention as the impact of mismanaging this risk can lead to significant consequences that includes regulatory actions, lawsuits and defense costs, and reputational damage.

According to the findings from the CyLab 2010 report by the Carnegie Mellon Governance of Enterprise Security, $214 per record is the average cost of a data breach, with an average total per-incident cost of $7.2 million in 2011; negligence is the leading cause of a data breach, at 41 percent of all reported cases; and 96 percent of breaches could have been avoided if reasonable data security controls had been in place at the time of incident. Data breach could lead to leakage of important information such as personal identification, financial account, patient healthcare, and corporate confidential information.

The two speakers Pam Townley, AVP of professional liability division of Chartis, and Jennifer Bolling, of Arthur J. Gallagher, recommended risk mitigation at the enterprise level. There needs to be commitment from senior level management. The company should use the most recent technologies and limit access to sensitive data. The company should understand the changing regulatory environment and implement plans to respond to a breach in a timely and compliant manner. There needs to be proper vetting of third party vendors and contract management. The company human resources should deploy proper hiring and termination techniques and provide employee training on how to classify and handle data. There needs to be safe and secure methods of disposing of data. The company should use a combination of physical security, written security policies and risk transfer to a third party such as insurance solutions to control the risks.

Mobile is Your Next Concession Opportunity?

By Liying Gu
“Mobile is the key to greater future commercial success in the air transportation industry,” said Henry Harteveldt, co-founder/airline & travel industry analyst, Atmosphere Research Group, in front of over 400 attendees at the ACI-NA Airport Concessions Conference held in downtown Denver on Nov.13.

Harteveldt believes that three factors drive passenger behavior: individualist, immediacy and inspiration. Therefore it is important to understand what makes passengers “tick” to enjoy better sales. A recent on-line benchmark survey conducted by Atmosphere on U.S. leisure airline passengers shows that for many, travel is a time for self-indulgence. The survey estimates that over 86 percent of the air passengers have an account on at least one major social network. More and more air passengers own and use portable tech devices such as smartphones and tablets, and half use their mobile devices to pay for items they have purchased. A critical mass of passengers now uses location-based social networks, increasing two-way dialogue.

Airports can utilize Bluetooth and other mobile tracking technology to track traveler locations and flow patterns, thereby enhancing customer experience. Harteveldt anticipates that mobile will become travel’s most important digital gateway.

Data from our latest benchmarking survey.

A similar theme was echoed in a presentation made by ICF SH&E. On average, a domestic passenger only has 35 discretionary minutes – so getting a passenger engaged at the airport should start before the person gets to the airport utilizing the right technology. The right technology would help engage a customer when they have a decision to make or time on their hands. Airports will need to create multiple technology channels that help the concessionaires and partners to market themselves effectively thereby supporting the creation of incremental non-aeronautical revenue.

ACI-NA is trying to go mobile. With this conference in Denver, ACI-NA debuted a smartphone app that puts all the details concerning the ACI-NA Airport Concessions Conference at the fingertips of the attendees. ACI-NA will use this event-specific app at future conferences.

Webinar Features Capital Program Management Best Practices

By Liying Gu and Nena Adrienne
The Strategic Planning and Performance Management Working Group hosted the eighth webinar in the Best Practice Forum series on Sept. 27 focusing on Capital Program Management. The attendance at this webinar was particularly high with over 70 airport representatives on the call to listen to two presentations by three speakers.

Judy M. Ross, deputy aviation director, planning, environmental and capital management division of the city of Phoenix Aviation Department, explained the capital planning process at the Phoenix Sky Harbor International Airport and stated that this process can be scalable to smaller airports depending on the complexity of the program. Their capital program consists of three long-term visions: communication and collaboration; defined capital planning process; and financially-feasible capital program. The program aimed to be communicative between divisions and departments, and encourage collaboration between them. To enable everyone to understand how the process works, the Capital Improvement Handbook was created as a guide to the whole process. Education on the process is through classes at implementation and at regular intervals. Periodic reviews of the processes and forums take place to make improvements. The software system used make 95 percent of the process electronic.

The second presentation was jointly made by Don Arthur and Sharon Sarmiento, who are both principals of the Unison Consulting. Arthur’s presentation focused on capital improvement program financial planning and in particular affordability analysis. Affordability analysis is described as what amount of capital cost is affordable – so the airport can meet its financial obligations while funding its capital program. The amount of capital costs an airport can afford depends on rates and charges methodology, cash flow and debt capacity. Sarmiento’s presentation focused on economic analysis as required by OMB and FAA. Economic analysis answers the question whether it makes sense to implement the project – do the benefits of the project outweigh the costs. According to Sarmiento, economic analysis differs from financial analysis as benefits and costs are defined more broadly, considering benefits and costs to all users and not just the airport.

Contact ACI-NA’s Liying Gu for more information.

One-Size-Fits-All Must Give Way to Risk-Based Security

By Christopher Bidwell
By 2024, the FAA predicts that the U.S. commercial aviation industry will transport over 1 billion passengers annually. With increasing passenger and cargo volumes and limited resources in the US, Canada and internationally, a risk-based aviation security system just makes sense. TSA has developed and implemented a risk-based known traveler program, PreCheck, which utilizes available data to assess risk and focus screening resources on those passengers about whom the least is known, and Transport Canada has a similar system.

We also need to abandon the “one-size-fits-all” approach to regulation and transition from prescriptive to performance-based security measures, and this is an area where Transport Canada is leading the charge.

International coordination and collaboration is critical to allow us to formalize risk-based initiatives, address the global aviation security challenge and develop a sustainable aviation system where passengers can transit seamlessly across international borders.

This afternoon, at the ACI-NA Annual Conference in Calgary, a panel of senior representatives from TSA, Transport Canada, ACI Europe and Embry Riddle Aeronautical University tackled these and other topics.

In discussing the programs TSA has launched to transition from a one-size fits all approach to aviation security, Doug Hofsass, associate administrator for risk-based security, discussed the expansion of TSA’s known traveler program, PreCheck, which is currently operational at 23 airports, and the plan to further expand the program to an additional 12 airports in 2012. To date, more than 2.7 million passengers have experienced expedited screening through TSA PreCheck screening lanes and TSA anticipates screening the 3 millionth passenger next week.

In order to expand the number of passengers eligible to participate in PreCheck and in accordance with an ACI-NA recommendation, Hofsass encouraged enrollment in Customs and Border Protection’s international trusted traveler programs, Global Entry and NEXUS.

Hofsass also mentioned the known crewmember program, through which uniformed pilots are subjected to identity-based screening and provided expedited access to sterile areas. The program is currently in place at 20 airports. By the end of the year, TSA plans to have the program in place and operational at 31 airports, including 28 Category X airports.

Another expansion of its risk-based security initiative involves enhancements to the screening of passengers 70 and older, who no longer need to remove light coats and jackets or their shoes. This program also allows children 12 and under to keep their shoes on when being screened at security checkpoints. After a pilot test at several large airports, the program was expanded to airports nationwide.

Although rudely interrupted by the clanging of a fire alarm bell being tested during the session, Erin O’Gorman, director general, aviation security, Transport Canada, mentioned that Canada has already begun to implement several initiatives outlined in the Beyond the Border Action Plan, jointly signed by Prime Minister Stephen Harper and President Barrack Obama. First, special lanes have been put in place at Canadian Pre-Clearance airports for NEXUS members. Second, Canada and the U.S. reached an agreement to mutually recognize their cargo security programs. Third, but definitely not last, Canada and the U.S. are collaborating on the development of known and trusted traveler programs, something that will allow Canadian NEXUS card holders to benefit from TSA PreCheck at some point in the future.

It was also refreshing to hear O’Gorman recount a recent discussion with Transport Canada inspectors who reported that the relationship with industry has transformed into a security partnership.

O’Gorman also raised the potential challenge of resilience of the aviation system in the face of some threat we haven’t seen or considered, and suggested that the political will to accept a certain amount of risk may be tested in the face of a future incident. Hopefully, the progress that has been made in advancing risk-based initiatives will not be jeopardized by some unforeseen event.

If and when we in the aviation community are faced with the next incident, we simply cannot abandon risk-based security measures. To do so would result in a regression to the costly and inefficient one-size-fits-all approach we striving diligently to abandon.

Olivier Jankovec, ACI Europe director general, mentioned that our system is still very reactive, particularly in Europe, and therefore, there are a lot of inefficiencies even though a substantial amount of data and intelligence information exists which could be leveraged to inform and focus limited screening resources.

In Europe, airports – not the government(s) – provide almost all the aviation security operational costs. Indeed, 29 percent of airports operating costs and 41 percent of airports staff are security related. With security costs increasing exponentially, there is even more need for a coordinated approach to aviation security.

Richard Bloom, associate vice president, academics, Embry-Riddle Aeronautical University indicated that risk-based security can be a challenge in the absence of information or data. He also suggested that most people tend to focus on the defensive security layers as opposed to offensive “tools” such as intelligence information, which can be utilized to help eradicate the threat.

Clearly, based on several recent events, we need to leverage every aspect of available intelligence information. Enhanced coordination and communication between countries, sharing pertinent security information can certainly help in filling in the missing pieces of the puzzle thus helping to mitigate threats.

Bloom also indicated that terrorism can be very effective because of the psychological impact on the survivors. He also mentioned that security is always an unfinished task.

As aviation traffic continues to grow, we need a risk-based aviation security system that uses available data to more effectively balance customer service and detection. Information is available at multiple points that can be readily utilized to help focus limited security resources on those about which the least is known. Collectively, we need to work together – across international borders – to address the global aviation security challenge through risk-based security measures and programs.